September 2006, International Finance Corporation (IFC)
The planning, design and construction of the Baku-Tbilisi- Ceyhan (BTC) pipeline provides a good example of an IFC-financed project that faced a wide variety of complex and often difficult social and environmental challenges. From the outset, both the sponsor and the lenders were committed to achieving sustainable outcomes and striving to ensure that the project was constructed and operated to international best practice environmental and social standards. At the time of its commencement, BTC was the largest cross-border infrastructure construction project in the world. The scale and multitude of environmental and social aspects on such a mega-project should not be underestimated nor should the amount of resources and level of effort expended by BTC staff during the planning and construction phases, or IFC staff during project appraisal and supervision.
This has been prepared by staff of the Environmental and Social Development Department of the IFC for the purposes of internal learning throughout the institution. While it is impossible to capture all the complexities and challenges encountered during the design and construction phase of the BTC project, this paper focuses on six key areas where lessons learned were thought to be most valuable and applicable to other IFC-financed projects. These are: environmental and social assessment and management (including contractor management); the regional review; stakeholder engagement and disclosure; land acquisition and compensation; monitoring and reporting; Lessons of Experience and, community investment. The project also yielded many valuable “process” lessons that may be useful to IFC staff and clients working on future projects.
